Tag Archives: SP 500

Bear Market Creates Opportunities Around the Corner

The sentiment is relentlessly bearish, the negative news and bearish forecasts are overflowing everywhere. It feels no end is in sight. Yes, the end is not near yet, but please keep it in perspective. When this is all done and over with, you will be presented excellent opportunities that you wish you had in the last cycle.

Growth Vs. Value

Over the previous 12 business cycles, the best money managers during a cycle produced average annual compounded total returns of 25% to, in a few rare cases, 30%. This small group consisted of either growth-stock managers or managers whose most successful investments were in growth stocks plus a few turnaround situations.

Bear Market Doesn’t End Easily

The semi-conductor sector is clearly in bearish territory. The superstar chip stock NVDA dropped 18.8% on Friday due to bad earnings and forecast. The chip sector ETF SMH topped in March 2018, but NVDA was the last man standing in chip sector until October 2018.

The Dow Jones Cycle Location 10262018

The damage has been done. It is confirmed that we are in the 4-year cycle high to low selloff phase. A 4-year cycle high to low selloff can last anywhere 3-9 months or 2-3 years. We will get more clarity after the quarterly closing on October 31, 2018.

Year End Rally Or No Rally

The stock market has suffered major technical damages across the board last week. Historically midterm election years Octobers are downright stellar. These Octobers have been a time of turnaround, with 12 post World War II bear markets ending in October, including the most recent, 1987, 1998, 2001, 2002 and 2011. Is the 2018 midterm election October an exception or will it follow the statistic to endow us a year end rally?